No headway in oil-gas exploration as country runs out of reserves

by Manjurul Ahsan
Rashidpur plant of the Sylhet Gas Fields Ltd.

Rashidpur plant of the Sylhet Gas Fields Ltd.

Much trumpeted exploration of oil and gas by foreign companies and the state-run Petrobangla brought no hope for the energy starved Bangladesh over the past seven years.
Little or no success and slow exploration activities are bound to significantly affect the projected power generation and industrial production, officials feared.
Over 4,000 billion cubic feet of natural gas has been consumed since 2007, while the state-run Bapex has discovered only two fields — Srikail in Comilla and Sundulpur in Noakhali — with 300 billion cubic feet of recoverable gas, according to the official data.
Experts said high gas consumption against the backdrop of low level of production and insignificant new discoveries came as a ‘big threat’ for the energy security of Bangladesh.
They warned that the country would face severe shortage of gas supply in next five years.
Petrobangla, the state-run Oil, Gas and Mineral Resources Corporation, can now supply about 2.3 bcf of natural gas a day against a demand for over 3 bcf with severe bad effect on power generation.
In 2013, Petrobangla supplied 794 million cubic feet of natural gas a day to the power stations against the demand of 1,180 mmcfd, according to data provided by Petrobangla.
The Awami League-led government during its immediate past tenure took a project to import expensive liquefied natural gas or LNG to increase the supply of gas by 500 million cubic feet a day to the national grid.
Petrobangla will have to spend between $16 and $18 to supply 1,000 cubic feet of natural gas to the grid from imported LNG while it spent about $1.2 for the same volume of gas, officials said.
‘The gas reserve is depleting at a rate of about 1,000 billion cubic feet a year,’ energy expert Mohammad Tamim told New Age.
He said transmission and distribution of gas to power plants, industrial power generators, CNG filling stations and fertiliser factories would be in jeopardy unless the situation is changed.
Several million CNG-run vehicles and more than two million domestic consumers will also lose their access to gas, Tamim, a professor of petroleum and mineral resources at Bangladesh University of Engineering and Technology, said.
Petrobangla chairman, Hossain Monsur, said, ‘We discovered two fields in recent years. But the reserves are very small.’
‘The country now does not have much potential structures on the mainland unexplored,’ he added.
Monsur said Petrobangla was giving priority to oil and gas exploration in the Bay of Bengal and reassessing old fields if more gas could be extracted from there.
The government, in the last seven years, signed five controversial production sharing contracts with three foreign companies for oil and gas exploration in five offshore blocks where exploration activities were yet to make any headway.
Another four contracts are waiting to be signed with the US oil company Conocophillips for oil and gas exploration in four offshore blocks.
Conoco, however, declined signing a contract for oil and gas exploration in the shallow sea block 7, saying a portion of the block was a part of deep sea. At the end of 2013, Petrobangla awarded the block to Conoco as single bidder under model PSC 2012.
Now Petrobangla will either have to go for a fresh tender for the block or offer Conoco with financial benefits which are offered for deep sea blocks, a Petrobangla official said.
In April 2014, three years after signing two PSCs with the government, Conoco also informed Petrobangla that it would not invest in drilling exploration wells in two ‘less prospective’ deep sea blocks 10 and 11 by its own means as it found single investment ‘risky’.
On June 16, 2011, the government signed two contracts with ConocoPhillips for oil and gas exploration in the deep sea blocks 10 and 11 and it completed two dimensional seismic data acquisition in early 2012.
In August 2011, the Bangladesh Petroleum Exploration Company, or Bapex, discovered a 50 bcf gas field at Sundulpur in Noakhali and a 161 bcf field at Srikail in Comilla near the Bangura field was discovered in July 2012.
The US oil company Chevron failed to discover a potential gas reserve in Hydrocarbon Block 7 in Patuakhali and Moulovibazar while Bapex also failed to discover gas in Sunetra and Kapasia structures.
The much talked-about Sunetra structure was named after the districts the structure spans — Sunamganj and Netrakona. The Kapasia structure is in Gazipur.
The volume of recoverable natural gas in Rashidpur and Titas gas fields has, however, increased by about 1,500 bcf in two years after Petrobangla subsidiary Bapex had conducted three dimensional seismic surveys on the fields.
The US oil company Chevron, as a foreign company, discovered the Bibiyana gas field in 1998 which was the last successful effort from a foreign company in the country.
After a decade-long inertness, the then interim government, in 2007-08 financial year, floated international tenders for oil and gas exploration in the deep water of the Bay of Bengal.
At the same time, the government initiated programmes to strengthen the petroleum exploration capacity of the state-run company Bapex.
The Awami League-led government enhanced the efforts for securing smooth and low-cost energy supply. But all the efforts failed to bring any hope for the country’s energy security, experts said.
Experts and Petrobangla officials suggested that domestically mined and imported coal should replace natural gas in power generation and liquefied petroleum gas should replace piped gas for household
use.
But the government continues to set up gas-fired power plants in both the public and the private sectors.
According to the government plan, dependence on natural gas for power generation will increase to 79 per cent in the 2015–16 financial year from 76 per cent in the 2012–13 financial
year.

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